Five Year Plans in IndiaGeneral Knowledge » Economy »
Five Year Plans in India
5 Year Plan in India ( 1951 – 56 )
- It was based on Harrod – Domar Model.
- Community Development Program was launched in 1952.
- Two – fold objectives were there :
- To correct the disequilibrium in the economy caused by 3 main problems – influx of refugees, severe food shortage and mounting inflation.
- To initiate a process of all – round balanced development to ensure a rising national income and a steady improvement in living standards.
- Emphasized on Agriculture, Price Stability, Power and Transport.
- It was more than a success, because of good harvests in the last two Years.
Second Five Year Plan of India ( 1956 – 61 )
- Also called ‘Mahalanobis Plan’ after its chief architect PC Mahalanobis. It was based on 1928 Soviet Model of Feldman.
- Its emphasis was on economic stability. Agriculture target fixed in the first plan was almost achieved. Consequently, the agriculture sector got low priority in the second five Year plan.
- Its objective was Rapid Industrialization, particularly basic and heavy industries such as iron and steel, heavy chemicals like nitrogenous fertilizers, heavy engineering and machine building industry.
- Besides, the Industrial Policy of 1956 emphasized the role of Public Sector and accepted the establishment of a socialistic pattern of the society as the goal of economic policy.
- Advocated huge imports which led to emptying of funds leading to foreign loans. It shifted basic emphasis from agriculture to industry far too soon. During this plan, price level increased by 30%, against a decline of 13% during the First Plan.
- At its conception time, it was felt that Indian economy has entered a take – off stage. Therefore, its aim was to make India a ‘Self – Reliant’ and ‘Self – Generating’ Economy.
- Also, it was realized from the experience of first two plans that agriculture should be given the top priority to suffice the requirements of export and industry.
- The other objectives of the plan included the expansion of basic industries, optimum utilization of country’s labor power and reducing the inequalities of income and wealth.
- Relied heavily on foreign aid ( IMF ).
- Complete failure due to unforeseen misfortunes, vizard Chinese aggression ( 1962 ), Indo – Pak war (1965), severest drought in 100 Years ( 1965 – 66 ).
- Prices increased by 36% in 5 – Years.
- Hence, third plan failed in every respect.
Three Annual Plans ( 1966 – 69 )
- Plan holiday for 3 Years.
- The prevailing crisis in agriculture and serious food shortage necessitated the emphasis on agriculture during the Annual Plans.
- During these plans a whole new agricultural strategy involving wide – spread distribution of High – Yielding Varieties ( HYVs ) of seeds, the extensive use of fertilizers, exploitation of irrigation potential and soil conservation was put into action to tide – over the crisis in agricultural production.
- During the Annual Plans, the economy basically absorbed the shocks given during the Third Plan, making way for a planned growth.
Fourth Five Year Plan India ( 1969 – 74 )
- The Fourth Plan set before itself the two principal objectives – growth with stability and progress towards self – reliance.
- Main emphasis on agriculture’s growth rate so that a chain reaction can start.
- Fared well in the first 2 Years with record production, last 3 Years failure because of poor monsoon.
- Had to tackle the influx of Bangladeshi refugees before and after 1971 Indo – Pak war.
- During the planning period, prices increased by about 61%.
Fifth Five Year Plan of India ( 1974 – 79 )
- The Fifth Plan prepared and launched by DD Dhar proposed to achieve two main objectives vizard, ‘Removal of Poverty’ ( Garibi Hatao ) and ‘Attainment of Self Reliance’, through promotion of high rate of growth, better distribution of income and a very significant growth in the domestic rate of savings.
- National Program of Minimum needs was initiated in which Primary Education, Drinking Water; Medical facilities in rural areas, Nourishing Food, Land for the Houses of Landless Laborers, Rural Roads, Electrification of the Villages and Cleanliness of the dirty suburbs were included.
- The plan was terminated in 1978 ( instead of 1979 ) when Janta Government, came to power.
Rolling Plan in India ( 1978 – 80 )
- There were 2 Sixth Plans – One by Janta Government ( for 78 – 83 ) which was in operation for 2 Years only and the other by the Congress Government when it returned to power in 1980. The Janta Government Plan is also called ‘Rolling Plan’.
- The focus of the plan was enlargement of the employment potential in agriculture and allied activities, encouragement to household and small industries producing consumer goods for consumption and to raise the incomes of the lowest income classes through minimum needs program.
Indian Sixth Five Year Plan (1980 – 85)
Increase in National Income, Modernization of Technology, Ensuring continuous decrease in Poverty and Unemployment, Population Control through Family Planning, etc.
Seventh Five Year Plan ( 1985 – 90 )
- The Seventh Plan emphasized policies and programs which aimed at rapid growth in food – grains production, increased employment opportunities and productivity within the framework of basic tenants of planning.
- It was a great success, the economy recorded 6% growth rate against the targeted 5%.
Eighth Five Year Plan of India ( 1992 – 97 )
- The Eighth Plan was postponed by 2 Years because of political upheavals at the Centre and it was launched after a worsening Balance of Payment ( BoP ) position inflation during 1990 – 91.
- The plan undertook various drastic policy measures to combat the bad economic situation and to undertake an annual average growth of 5.6%.
- Some of the main economic performances during Eighth Plan period were rapid economic growth, high growth of agriculture and allied sector, and manufacturing sector, growth in exports and imports, improvement in trade and current account deficit.
- The most notable feature of the Eighth Plan period was that the GDP grew at an average rate of 6.8% exceeding the target growth rate of 5.6%.